Because of the Coronavirus crisis, governments are developing all kinds of policies worldwide. In Latin America, although the spread of the disease is not reaching the numbers of other regions, countries are not standing still in this context, as exemplified by the case of Mexico.
The Government of Mexico in coordination with the National Banking Commission (CNBV) and in response to the request of the institutions that are part of the Mexican financial system, has publised specific accounting criteria temporary applicable to guarantee payments of credits, guarantees and interests to mitigate the economic effects.
These criteria are directly applicable to Credit Unions, SOFIPOS (Popular Financial Companies), SOCAPS (Cooperative Savings and Loan Societies) and credit institutions.
The main impact of adopting these special accounting criteria is the final beneficiary of obtaining these credits, by the affected financial institutions, i.e people with business activities, SMEs and individuals with personal loans.
In general terms these criteria, consider the following points of relevance:
- A) Instructions on how to disclose in the financial statements of the recurring year and its effect on the subsequent years the differences for the adoption of the measures. As well as the adoption of specific rules recommended in the Financial Reporting Standards.
- B) Specific requirements and how to apply the mesures, for credits, contractual loans and in which payment terms these special criteria apply.
- C) Total or partial deferral of interest and its payments to principal.
- D) Renewal of credits in primary sectors of the Mexican economy. (Agriculture,cattle raising, etc.)
- E) Encourage the granting of bonuses and discounts to customers from these mentioned institutions.
For consultation of specific information regarding criteria, government administration has made available a guide and detailed reports of these temporary and extraordinary measures that can be consulted at the following link.
The Coronavirus crisis is causing businesses to face huge challenges and, in this context, reliable and up-to-date information is essential. At Auxadi, we are exports in providing accounts, tax compliance and international payroll management to our clients. If you would like us to expand on the above information, please do not hesitate in getting in touch with us.